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Custodia CEO Slams US Government Over Broad Crackdown, Lack Of Regulatory Clarity In Crypto Industry

18 Feb 2023

The largest marketplace for non-fungible tokens (NFTs), Opensea, has announced major changes to its fee structure and policies in response to a shift in the NFT ecosystem. The company detailed that it will drop fees to zero for a limited time and offer an optional creator earnings model with a minimum of 0.5% for all collections that do not use onchain enforcement.

Opensea, the NFT marketplace, announced on Friday that it is dropping fees in response to a major change that started in October 2022. “We began to see significant volume and users migrate to NFT marketplaces that do not fully enforce creator earnings,” Opensea said. “Today, that shift has accelerated dramatically despite our best efforts.”

Opensea pointed out that roughly 80% of the total ecosystem volume is not paying full creator earnings, and most of the sales volume has moved to a no-fee environment. The NFT market has faced competition recently from the new market Blur, which has captured $1.4 billion in all-time sales volume in a short period. However, Blur’s all-time sales are small in comparison to Opensea’s $34.53 billion in all-time sales.

The NFT marketplace also faces competition from digital collectible markets Looksrare and X2Y2. Opensea hopes the new changes will strike the right balance of incentives and motivations for all ecosystem participants, including creators, collectors, and power buyers and sellers. Additionally, the company announced it is updating its operator filter to allow sales using NFT marketplaces with the same policies, including Blur. “This is the start of a new era for Opensea. We’re excited to test this model,” the company said.

What do you think about Opensea’s decision to drop fees to zero and introduce a new creator earnings model in response to changes in the NFT landscape? Share your thoughts in the comments below.

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Following a Brief Fee Spike, Gas Prices to Move Ethereum Drop 76% in 12 Days

Transaction fees on the Ethereum network are dropping again after average fees saw a brief spike on April 5 jumping to $43 per transfer. 12 days later, average ether fees are close to dropping below $10 per transaction and median-sized ... read more.

The largest marketplace for non-fungible tokens (NFTs), Opensea, has announced major changes to its fee structure and policies in response to a shift in the NFT ecosystem. The company detailed that it will drop fees to zero for a limited time and offer an optional creator earnings model with a minimum of 0.5% for all collections that do not use onchain enforcement.

Opensea, the NFT marketplace, announced on Friday that it is dropping fees in response to a major change that started in October 2022. “We began to see significant volume and users migrate to NFT marketplaces that do not fully enforce creator earnings,” Opensea said. “Today, that shift has accelerated dramatically despite our best efforts.”

Opensea pointed out that roughly 80% of the total ecosystem volume is not paying full creator earnings, and most of the sales volume has moved to a no-fee environment. The NFT market has faced competition recently from the new market Blur, which has captured $1.4 billion in all-time sales volume in a short period. However, Blur’s all-time sales are small in comparison to Opensea’s $34.53 billion in all-time sales.

The NFT marketplace also faces competition from digital collectible markets Looksrare and X2Y2. Opensea hopes the new changes will strike the right balance of incentives and motivations for all ecosystem participants, including creators, collectors, and power buyers and sellers. Additionally, the company announced it is updating its operator filter to allow sales using NFT marketplaces with the same policies, including Blur. “This is the start of a new era for Opensea. We’re excited to test this model,” the company said.

What do you think about Opensea’s decision to drop fees to zero and introduce a new creator earnings model in response to changes in the NFT landscape? Share your thoughts in the comments below.

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Following a Brief Fee Spike, Gas Prices to Move Ethereum Drop 76% in 12 Days

Transaction fees on the Ethereum network are dropping again after average fees saw a brief spike on April 5 jumping to $43 per transfer. 12 days later, average ether fees are close to dropping below $10 per transaction and median-sized ... read more.

Caitlin Long, CEO of crypto bank Custodia, criticized the U.S. government for its handling of a massive crypto fraud that occurred months before the company’s collapse. She made her remarks in a blog post after disclosing evidence to law enforcement. Long’s post followed Custodia’s unsuccessful application to become a member of the Federal Reserve System, which was denied by the Federal Reserve Board.

Executives of digital currency and blockchain companies are displeased with the U.S. government’s crackdowns and lack of regulatory clarity. Brian Armstrong, CEO of Coinbase, has called on Congress to pass clear legislation on cryptocurrencies, and Jesse Powell, CEO of Kraken, has echoed that message. On Feb. 17, Caitlin Long, CEO of Custodia, published a blog post explaining that she had given evidence to authorities about a crypto fraud case months before the company collapsed, leaving its millions of customers with losses.

In her blog post titled “Shame on Washington, DC for Shooting a Messenger Who Warned of Crypto Debacle,” Long argues that the current enforcement actions are a misguided crackdown on the entire industry. “Calls for a crackdown today are coming from many of the same policymakers who were charmed by the fraudsters,” Long wrote. It is well known that senior members of the U.S. Securities and Exchange Commission (SEC), the White House, and the Commodity Futures Trading Commission (CFTC) met with Sam Bankman-Fried (SBF) and high-ranking FTX officials.

Additionally, an estimated one in three members of Congress received a direct contribution from SBF and his inner circle. “In a 180-degree turn, [policymakers are] now throwing the baby out with the bathwater,” Long wrote in her blog post. The Custodia CEO also mentioned that government officials likened her crypto bank’s operation to FTX’s misconduct and collapse, resulting in an ambush on the crypto industry by officials.

“Custodia Bank recently found itself in the crosshairs of Beltway Politics at their worst,” Long stressed. “Custodia was simultaneously attacked by the White House, the Federal Reserve Board of Governors, the Kansas City Fed, and Senator Dick Durbin (who conflated our non-leveraged, 100-percent liquid and solvent bank with FTX in a Senate floor speech, in which he attacked two companies run by female CEOs — Fidelity and Custodia — implicitly comparing us to a 29-year-old accused fraudster who is now wearing an ankle bracelet).”

The Custodia CEO added:

Custodia tried to become federally regulated – the very result bipartisan policymakers claim to want. Yet Custodia has been denied and [is] now disparaged for daring to come through the front door.

After Long published her blog post about the situation, Jesse Powell, CEO of Kraken, responded to her Twitter thread on the subject. “I can’t tell you how infuriating it is to have pointed out massive red flags and obviously illegal activity to regulators only to have them ignore the issues for years,” Powell tweeted. “‘They’re offshore. It’s complicated. We’re looking at everybody.’ FOR YEARS. Then to be used as their example.”

The complaints from Long, Armstrong, and Powell come after the SEC’s enforcement action against Terraform Labs and CEO Do Kwon, nine months after the entire Terra ecosystem collapsed. The U.S. securities regulator was criticized for being late to the game, and many believe the SEC is simply throwing spaghetti at the wall to see what will stick.

What is your opinion on the criticisms from Custodia’s CEO regarding the U.S. government’s handling of the recent enforcement actions in the crypto industry and the red flags she pointed out before a crypto company’s collapse? Share your thoughts on this topic in the comments section below.

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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